Multichoice paid R1.3 billion for a fifth of a Nigerian bet shop known for 30% commissions
- Multichoice has valued Nigerian sports-bet company BetKing at R6.5 billion – at least – with a 20% buy.
- The pay-TV company says it wants to "to expand the group’s entertainment ecosystem further".
- In Nigeria, BetKing is well known for offering shopkeepers commissions of up to 30%, with a structure designed to push punters towards specific, risky types of bets.
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South African pay TV company Multichoice has paid R1.3 billion – and may still pay another R500 million more – for a 20% stake in Nigerian sports-bet company BetKing, it disclosed on Thursday.
It had bought the shareholding "[i]n order to expand the group’s entertainment ecosystem further", it said in a brief note in its interim results statement.
The first payment was an "upfront investment", Multichoice said, valuing BetKing at a minimum of R6.5 billion. The additional payment is dependent on earn-out targets, which it did not disclose, up to the end of 2023.
In its home country it has built an agent network it says numbers more than 8,000 in part through a commission structure that offers shop-owners up to 30%, for transactions via equipment it provides, with the promise of payment within 24 hours.
In order to hit the high commission payments, agents must push players towards high-risk bets. Those who do not will earn 1% instead.
Multichoice said its group intends "further expand its entertainment ecosystem and revenue prospects by offering new products and services and by pursuing new growth opportunities."
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